From: rah@shipwright.com (Robert Hettinga)
Date: Wed, 23 Aug 95 08:59:31 PDT
To: perry@piermont.com
Subject: Re: e$: The Book-Entry/Certificate Distinction
Message-ID: <v02120d01ac60f9d955ba@[199.0.65.105]>
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At 10:02 AM 8/23/95, Perry E. Metzger wrote:

>Actually, what you've just described is general commercial paper, not
>just a bond. Anything that lists a sum certain in money to be paid on
>a date certain (with various other parameters, too, like a place) is
>negotiable commercial paper. Checks, notes, and other instruments are
>all commercial paper. They are not, by the way, certificates in the
>sense that I suspect you mean.

I really don't know. If a digital personal debt certificate isn't a bond,
but is a subset of commercial paper, we may be quibbling about definitions,
like Tim was saying.

So, let's look at this for a second. First, a check is a kind of
certificate pointing to a book entry in a bank somewhere, payable upon
demand. A note or commercial paper is a promise to pay money plus interest,
cash included, at a certain time in the future. So's a bond, but the
duration is longer. It's easy to see how they're all certificates, though
they can be held at a clearinghouse and thus be be book-entries. Clear as
mud, I guess... I'll try better next time when I've gotten more running
room.

We agree that it's a fixed income instrument of some kind, right?
Certainly it's not completely anonymous, but your pseudonymous key can
borrow money if its reputation is clean enough.

Cheers,
Bob Hettinga

-----------------
Robert Hettinga (rah@shipwright.com)
Shipwright Development Corporation, 44 Farquhar Street, Boston, MA 02131
USA (617) 323-7923
"Reality is not optional." --Thomas Sowell
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